Statutory Compliance Interview Questions & Answers

Question 1. What Is Pf Year?

Answer :

PF accounting is done from March to February of every year. This period is called as PF Year. This is applicable only to PF and does not have any effect in any other modules.

Question 2. Does Every Employee Contribute To Pf?

Answer :

According to the PF rules (as of 2004), all employees who draw a PF Basic of less than Rs. 15000 have to contribute to PF. This is mandatory. For employees having PF Basic more than Rs. 15000, the deduction/contribution will be on 15000. However in most companies, PF is applicable to all employees. There are exceptions (people who do not contribute) but these are few.

Question 3. What Is Pf Basic Or Pf Gross?

Answer :

This is the amount on which the PF contribution or deduction is calculated. Generally in 95% of the companies this is Basic + Basic Arrears + DA + DA Arrears. However, there are always exceptions and some companies want it to be a little different. In that case, we can change the PF Basic formula to cater to the client's requirements.

Question 4. What Are The Various Reports Associated With Pf?

Answer :

• PF Monthly report: This is a report that needs to be generated every month and it contains the details of Employee PF, Employer PF, VPF, and PF Basic for the employee. Based the numbers appearing in this report, the company needs to make payments to the government every month.
• PF - Form 5: This is a monthly report giving a list of all employees who have joined the company in the current month. Based on an option setting, this report can also indicate all the employees whose payroll has been processed for the first time in this month.
• PF - Form 10: This is a monthly report giving a list of all employees who have left/resigned the company in the current month. Based on an option setting, this report can also indicate all the employees whose PF has been settled in this month.
• PF - Form 12A: This is a monthly report giving a summary of the number of employees currently covered under PF, total contribution for the month, and other details.
• PF - Form 3A: This is a monthly report giving a summary of all the PF deductions (employee and employer) done for the employee in a given PF Year.
• PF - Form 6A: This is a monthly report giving a summary of Form 3A per employee. This report gives the total deductions done for each employee in a given PF Year.

Question 5. What Are The Various Options For Pf Form 10?

Answer :

Form 10 can be generated based on either Leaving Date or Settlement Date. This can be set in the General Options. The option name is USE_SETTLEDATE_IN_FORM10. If you set this option to YES then the Form 10 report will list all employees who are settled in the given date range. Otherwise, it will pick up all employees who have resigned in the given date range.

Question 6. What Is The Link Between Pf And Income Tax?

Answer :

As per Indian Tax laws, any contribution done by the employee towards PF can be considered for Section 88 rebate. 

In Folklore, any deduction done for PF and VPF is automatically considered for Section 88 rebate in the Income Tax module.

Question 7. What Are The Various Esi Reports?

Answer :

ESI Monthly report: this report is generated monthly. This gives the total deductions/contribution (employee and employer) done for each employee for a month.

ESI Form 6: this is a half yearly report.

ESI Form 7: this is also a half yearly report.

Question 8. What Are The Other Rules Governing Esi?

Answer :

ESI contribution stops when the employee's gross income crosses Rs. 15000/- (up to May 2010 this was 10000)

• This stoppage of ESI cannot happen in any month. The change over from ESI deduction to No ESI deduction can happen only in 3rd (March) or 9th (September) month i.e. even if an employee's salary crosses, 10000 in July, the ESI deduction will continue until August.
• In the September payroll, the employee's ESI deduction will be zero (as has crossed Rs. 10000/-).
• The comparison of income is done with Full Income and the calculation of ESI is done on the actual payout (income).

Question 9. An Employee Has Esi Deduction But Is Not Appearing In The Esi Report. What Could Be The Issue?

Answer :

ESI report considers a field called ESI Eligibility. An employee name will display in the ESI report only if marked as ESI Eligible in employee information. 

Verify if PF Eligible and ESI Eligible are selected in the Employee Information page of your application.

Question 10. What Is Esi Rules?

Answer :

ESI. Scheme being contributory in nature, all the employees in the factories or establishments to which the Act applies shall be insured in a manner provided by the Act. The contribution payable to the Corporation in respect of an employee shall comprise of employer’s contribution and employee’s contribution at a specified rate. The rates are revised from time to time. Currently, the employee’s contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employees in every wage period. Employees in receipt of a daily average wage up to Rs.70/- are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.

Question 11. What Are The Rates For Contribution (deduction) To Esi?

Answer :

For employees, ESI deduction rate is 1.75% of the ESI Gross salary.

For employer, ESI contribution is at the rate of 4.75% of the ESI gross salary.

Question 12. What Is Esi Gross Salary?

Answer :

Generally, all the income components paid to an employee is considered for ESI Gross computation. In Folklore, ESI Gross is defined by the user. User indicates which income components are to be considered for ESI Gross.

Question 13. How To Do Pf Process For My Existing Employees Using Greythr On A Monthly Basis?

Answer :

1. Payroll → Process Payroll → Quick process (Your payroll will be processed here)
2. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result → then, Select ‘Regular’ as a type → Click generate ECR file              
3. Then a text file is downloaded on your system, PF admin user should login to PF Unified Portal and upload the generated ECR text file from greytHR

Question 14. How To Do Pf Process For Resigned Employees Using Greythr?

Answer :

1. Under Employee tab → Information → Separation → Select the employee and furnish the resignation details (tentative relieving date etc.,)    
2. Once employee has left the organisation (after serving his notice period) do the following:   
   Payroll → Payroll Inputs → Final settlement → Select the employee → Finish the settlement process
3. Payroll → Process Payroll → Quick process (Your payroll will be processed here)
4. Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result → then, ‘Exit Employees’ as a type → Click generate ECR file                                                 
   Then a text file is downloaded on your system, PF admin user should login to PF Unified Portal and upload the generated ECR text file from greytHR

Question 15. Where To Enter The Uan Number In Greythr?

Answer :

Under Employee → Information → PF Details add all the details

Payroll → Process Payroll → Quick process (Your payroll will be processed here)

Go to Reports → Search for ECR → Select ‘PF - ECR Format’ Report from the search result → then, ‘New Joinees’ as a type → Click generate ECR file                                                     

Then a text file is downloaded on your system, PF admin user should login to PF Unified Portal and upload the generated ECR text file from greytHR 

Question 16. How To Do Pf - Process For A New Entrant To Your Organisation Who Has Never Been Previously A Contributing Member Of Pf Using Greythr:?

Answer :

Login to greytHR → go to Actions tab → Select the ‘Add employee link’ → Enroll an employee into greytHR by filling in all his necessary details, under the PF section - enable ‘Eligible for PF’ (Select ‘Regular PF Contribution (Max 1800)’  (or) ‘Excess PF Contribution (Above 1800)’)

Once you click ‘finish’ after enrolling an employee, on the same screen under related action select ‘Add Salary’

Enter only the Annual CTC of the employee (System will automatically do the component wise salary breakup)

PF Admin user needs to login to → Unified PF Portal with relevant KYC for the new member → Upload them and generate UAN

Enter the generated UAN number and the PF number in greytHR

Question 17. What If Family Pension Fund Or Fpf Or Employee Pension Scheme Or Eps?

Answer :

The contribution made by an employer towards PF is split into contribution towards PF and contribution to another scheme called Pension Scheme.

Question 18. I Have An Error While Exporting Form 3a - (form 3a) To Edi Format. What Do I Verify?

Answer :

Verify if the ODBC driver for PHP is installed on the PC, where the export is happening. This is needed as the EDI file is generated in DBF format.